Correlation Between Victory Capital and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Victory Capital and Tekla Healthcare at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Victory Capital and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Capital Holdings and Tekla Healthcare Investors, you can compare the effects of market volatilities on Victory Capital and Tekla Healthcare and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Victory Capital with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Capital and Tekla Healthcare.
Diversification Opportunities for Victory Capital and Tekla Healthcare
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Victory and Tekla is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv and Victory Capital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Victory Capital Holdings are associated (or correlated) with Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Inv has no effect on the direction of Victory Capital i.e., Victory Capital and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Victory Capital and Tekla Healthcare
Given the investment horizon of 90 days Victory Capital Holdings is expected to generate 2.41 times more return on investment than Tekla Healthcare. However, Victory Capital is 2.41 times more volatile than Tekla Healthcare Investors. It trades about 0.25 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.16 per unit of risk. If you would invest 6,058 in Victory Capital Holdings on August 28, 2024 and sell it today you would earn a total of 1,049 from holding Victory Capital Holdings or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Capital Holdings vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Victory Capital Holdings |
| Tekla Healthcare Inv |
Victory Capital and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Capital and Tekla Healthcare
The main advantage of trading using opposite Victory Capital and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Capital position performs unexpectedly, Tekla Healthcare can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tekla Healthcare will offset losses from the drop in Tekla Healthcare's long position.| Victory Capital vs. Federated Premier Municipal | Victory Capital vs. Blackrock Muniyield | Victory Capital vs. Diamond Hill Investment | Victory Capital vs. NXG NextGen Infrastructure |
| Tekla Healthcare vs. Tekla Healthcare Opportunities | Tekla Healthcare vs. Eaton Vance Tax | Tekla Healthcare vs. Tekla World Healthcare | Tekla Healthcare vs. Cohen Steers Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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